Like many in the gaming and metaverse sector of the crypto space, Enjin Coin (ENJ) and Decentraland (MANA) pumped hard after Facebook’s shift in strategy last week.
This week we’re seeing pullbacks from these moves, so today we’ll take a look at technical setups that may be worth watching for both the bulls and the bears on these tokens.
Last week, Facebook changed its name to “Meta,” reflecting it’s strategy re-focus on the metaverse going forward, crypto assets quickly rolled up into the spot light, sending projects and tokens focused on this space to the moon.
Decentraland (MANA) was definitely one of those projects, as this native token is used for not only for buying land and items in Decentraland (a virtual world or Metaverse), but also for policy governance.
Before the announcement, MANA/USD was trading right around $0.80 before quickly seeing a high around just under the $5.00 handle before pulling back…a massive 6x move in just a couple of days!
Since then volatility has calmed down quite a bit with the market consolidating around the 3.00 handle so far this week. On the four hour chart above, we can see that the $3.50 area seems to be drawing in the sellers, while $2.60 is being held down by the bulls.
In the short-term, with no fresh catalysts, we may see some choppiness from here, or arguably some further profit taking by shorter-term players. That makes a break below $2.50 a move to watch if you’re a short-term bear looking to take further profit or out right short if you can.
For the bulls, a break above the 3.50 handle is a positive sign that the up move may continue, but it’s not likely to be a big momentum move like we saw last week without another fresh catalyst (i.e., more big names switching focus to this space).
Enjin coin (ENJ) was also a major beneficiary of last week’s pump, trading around 2.30 on the day of Facebook’s announcement to nearly 3.50 a couple of days later. While not as dramatic as MANA’s move above, a +50% rally is still quite an exciting move for the bulls nonetheless.
ENJ is the native token for the Enjin network, a platform for building NFTs and decentralized games. The project has been around since 2017 and with stats like over 1.7M wallets installed, 1.16B assets in the ecosystem, and a $2B market cap, it’s likely the network will grow and benefit as the paradigm shift to the metaverse continues.
In terms of price action, it looks like traders aren’t making much headway past the $3.00 – $3.50 area, potentially forming a bearish double top pattern at the moment. That means the odds are growing that we could see a further pullback in the short-term, possibly to the $2.50 handle (previous strong area of interest/rising trendline) by the end of this week based on the daily ATR of roughly $0.25 – $0.30. If that’s the case, bullish reversal patterns in that area may draw in longer-term buyers if traders continue to see Enjin as a great way to get exposure to the metaverse.
What do you all think? MANA and ENJ on your watchlists? Is this just the start of a longer-term rally higher or will we see more profit taking? Let me know in the comments section below!